SFL,
Your post and the case you are putting forward is an old concept at least as far as the traders on this BB are concerned,, . If you search for some of the 1999-2000 posts you will come across many of arguments both pro and against .
In light of your argument I have the following to say.
1) Scalping is NOT risk adjusted and dangerous and MUST be avoided at all cost. Scalping is gangster trading . Did not use to be before decimalization .
2) The zero profit rule applied by VWAP codes makes market very efficient and hence those who are not algorithmic scalping eventually LOSE to program traders.
3) Order book analysis is not useless but does not justify the time and effort.
4) VWAP codes can populate, de populate, spoof the order book in nano- second which a trader has near to zero chance of recognising the true flow.
5) The dual sided algorithm are extremely intelligent to fake the order flow . The buy and sell programs are not that difficult but as I said dual vwap based codes warp your trading model..
6) The tell tale traces are there but before you identify and capitalise on them other program trades trade them and an average trader is left guessing .
7) Iceberg orders are no longer a key in identifying the flow as they are intelligently distributed by third party buy/sell codes/
8) Even program traders get caught scalping if a new information( all categories of NEWS ) HIT the market
ALL IN ALL.. forget it ,,
I realise you are here to sell your E BOOK and get a donation but my interest is to tell the whole story/
Now if you think I AM WRONG AND YOU CAN CALL THE MARKET THEN I AM RUNNING MY MONTHLY LIVE TRADING SEMINAR 24th SEP ,,, come and show me LIVE how you do it.
Of course you can claim you are making a million here and a million there using order book analysis which in this case I would say GOOD LUCK BUDDY because i cannot do what you do ...
Grey1
Grey1
If you make money doing what you do, then I also say "good luck" to you, sir, and may the trading gods be in your corner. But you are not telling the whole story.
The concept of scalping may not be new to you but I've received many responses from people on this site who are not familiar with it and are looking for more information.
I've traded U.S. treasury futures, the Eminis, the bund and bobl, the eurostoxx, the dow, as well as stocks on the Nasdaq and the NYSE and I can tell you that scalping works in all of those markets except NYSE stocks. Specialists still run it. It is what it is.
Algorithms certainly have an impact but that is why you avoid playing in the chop. You pick spots where it is clear that a person is making the decisions because, as you say, "Even program traders get caught scalping if a new information( all categories of NEWS ) HIT the market". If program traders override their own programs, that sort of makes my case for me. Someone else said something about emotions making up 90% of trading and if you have a technical approach, you're cutting out the emotions. I agree that a trader must have an extraordinary amount of personal discipline but wouldn't it be wise to have a grasp on how emotions affect the market? Isn't it wise to understand that when a bunch of people panic and sell, you don't want to stand in front of them. Not until they're all done selling. It's not rocket science.
The markets are not efficient. I'm surprised you even said that. They never have been and they never will be because this is a big damn game. In theory, a stock is worth a certain price but how do you know what that price is? You can't see the company's books. In theory, a commodity is worth a certain price but oil was at $145 two months ago and now it's at $107. Did the fundamentals change so much in two months? Did the algorithms bring it back in line?
No. When more money was interested in buying, it went up and when more money was interested in selling, it went down. It's that simple.
Scalping is risk adjusted to the extreme because a scalper is always looking for the best possible price. Sometimes I miss trades because of this but also saves me sometimes. Scalping is simply about looking for momentum and trying to ride it. When there's not any, you don't trade.
My thing with technicals is that, if a technical setup works, there's a reason for it. It didn't work because it's a technical setup. It worked because more money went with the setup than against it. Even if it was money being tossed around by an algorithm, you still see the trades taking place. You see the market trade 1,000, then go bid the next price...and the next.
In regards to calling the market live, the only way I could do that is if you are watching my TT screen...a project I'm working on but am not allowed to discuss in the forums. I freely admit that my opinion can change very quickly and I consider that to be a good thing because the market can reverse at the drop of a hat. Being capable of scratching has saved me much money and one of the points I stress is, if you're a day trader, you just can't take 10 and 15 point losers and you can't let winning trades turn into losing trades. However, I sent a request to join your group and will try to listen in on your next meeting (depending on what time it is). I am curious about your methods.
And I didn't write the book for you. I wrote it for traders who aren't familiar with scalping or how to do it profitably and it's designed to keep people from becoming bogged down in a quagmire of charts and indicators. To give them a new perspective and to explain what actually drives markets...money.